China Can’t Get Enough Of The World’s Cheapest Crude

Canada’s oil industry woes have been a topic of discussion in the media for some time now, what with the persistent delays in the Trans Mountain expansion, unyielding opposition to anything that involves pipelines, and the growing crude production from the oil sands. The latest news, however, is good news. Chinese refiners are buying growing amounts of Canadian crude, taking advantage of a substantial discount in its price to the U.S. benchmark, brought about by the above combination of factors. Earlier this month Bloomberg reported Chinese refiners were buying Canadian heavy that was trading at a discount of as much as US$50 to West Texas Intermediate. In a context of rising prices—all but Canadian crude, apparently—a $50-per-barrel discount is more than a good bargain. It’s an excellent bargain, especially for refiners who have just completed summer maintenance and plan to increase their imports on higher local fuel demand. China […]